SA Tax Return - Paying Extra Tax on Charitable Giving!

Simes122

Not sure if I filled my tax return in wrong when submitting this morning, but one thing surprised me.   I've done some charitable giving over the year 22-23 like many - cancer research, sponsorship etc.  And used Gift Aid.  I hadn't appreciated that when you add the amounts given into your tax return, that there would be additional tax to pay.  It wasn't a huge amount of money in the scheme of things, it just surprised me that there was an additional cost to my charitable giving.  Is it because I'm a HR taxpayer perhaps?  Or have I entered it wrong? 

Dazed_and_C0nfused

Have you compared the tax calculation without the Gift Aid entry and with it?

Specifically the bottom line showing the final amount of tax due/overpaid 🤔

Simes122

Yes, it definitely an addition as a consequence of the Gift Aid - it increases the amount of tax due as far as I can tell!!!!

[Deleted User]

Did you pay sufficient tax to ‘cover’ the tax claimed under gift aid?

Simes122

[Deleted User] said:

Did you pay sufficient tax to ‘cover’ the tax claimed under gift aid?

Indeed - I'm a HR taxpayer.   The calculation shows a line Tax Due on Gift Aid Payments.   The first figure is the amount I gifted, x 1.25.  So it's grossed up.  Then it says x20% and the amount of tax payable which is added to my total tax payable.

[Deleted User]

Simes122 said:

purdyoaten2 said:

Did you pay sufficient tax to ‘cover’ the tax claimed under gift aid?

Indeed - I'm a HR taxpayer.   The calculation shows a line Tax Due on Gift Aid Payments.   The first figure is the amount I gifted, x 1.25.  So it's grossed up.  Then it says x20% and the amount of tax payable which is added to my total tax payable.

And your basic rate band should/will have been extended by the grossed up gift aid I.e. the amount that you pay at basic rate as opposed to higher rate has been increased?

In other words the amount upon which you pay tax at 40% has been reduced by the gift aid grossed up.

Simes122

Ah yes, I see a note above in the calculation that my basic rate has been increased to reflect the Gift Aid amount - I'd missed that entirely.  Many thanks!

[Deleted User]

Simes122 said:

Ah yes, I see a note above in the calculation that my basic rate has been increased to reflect the Gift Aid amount - I'd missed that entirely.  Many thanks!

The primary reason for the format of the calculation is for those who do not pay enough tax to cover the tax on the gift aid. For example, Toal tax payable NIL plus tax due on gift aid payments!